VW Works Council Chairman Osterloh criticizes plant closures due to Corona

Now Volkswagen Works Council Chairman Bernd Osterloh speaks out and is substantively right: Because many companies are seeing the pandemic as an opportunity for plant closures and production relocations, Osterloh literally:

“This is nothing more than fleeing from collective bargaining agreements and locations, and it must not be allowed.”

In fact, reports of plant closures, especially in high-wage countries, have not ceased since midyear—despite the possibility of short-time work: Volkswagen Works Council Chairman Bernd Osterloh has now explained to the “Braunschweiger Zeitung” that the crisis is seen by many companies as an opportunity to close plants and relocate production to countries with lower labor costs. IG Metall Chairman Jörg Hofmann expressed a similar sentiment on the matter. He accused industrial corporations of using the corona crisis as a pretext for massive job cuts, and particularly of quickly closing already threatened or smaller sites:

“A number of employers are using the crisis to initiate a clear-cut in Germany and relocate work to low-wage countries.”

Hofmann told the “Süddeutsche Zeitung” that he was particularly annoyed that “some companies are simultaneously taking advantage of liquidity assistance or other tax-financed support.” Then the planned plant closures are “scandalous.” For example, it is planned to relocate the scope of the MAN plant in Steyr to Poland and Turkey, although the Austrians can show the same order backlog in 2020 despite corona as they did in 2019. However, 2,300 jobs in Turkey and Poland are cheaper than in Austria, where these jobs are to be eliminated. Federal Labor Minister Hubertus Heil also expressed his irritation over the extent of the plans at auto parts supplier Continental over the weekend: The SPD politician explained to the “Rheinische Post”:

“There is no question that the automotive industry has been hard hit by the corona crisis and is also in a transformation process. Nevertheless, I have no understanding for a radical job-cutting program in this area.”

What does that mean?

In fact, the anticipated wave of corona-related layoffs is now just beginning: Numerous companies and suppliers in the automotive industry have announced major job cuts. It is noticeable and annoying that in many cases, it is primarily locations in Germany and Austria that are affected, particularly small locations where factories and assembly plants are often major employers. These places, in particular, bleed out very quickly. At the same time, the proclaimed “transportation transition” is likely to lose momentum. Because who has the courage and nerve to order a new environmentally friendly vehicle now if he does not know whether he will still have his salary at the end of the year? Therefore, manufacturers are also sawing off the branch they are sitting on. Because the large numbers of high-priced vehicles are still sold in the EU in the high-wage nations, and many customers come directly from the auto industry.